Minas. Results Oriented State.

Government of Minas Gerais
— Results-Oriented State, April 2008

Syllabus
— The World Bank

Minas Gerais

Management Shock – 1st generation

Management Shock – 2nd generation

World Bank partnership

State of Minas Gerais

‣ 587,000 Km2,
covering 853 municipalities
(same as the French system)

‣ Total n. of municipalities: 853 Brazil

‣ Population: 20 million
Urban: 84,6% Rural: 15,4% Minas Gerais

‣ Capital: Belo Horizonte: 2,4 million
Metropolitan area: 4,9 million

‣ GDP: US$ 130 billion, 9 % of country’s
(3rd in the country, close to that of Chile)
Agriculture and Livestock: 8,8%
Industry: 33,4% Services: 57,8%

Minas Gerais

Economy

‣ 2nd Largest National Exporter
Accounting for 1/3 of the trade balance surplus

‣ Industrial Production (2nd in the country)
Largest iron and steel production in Brazil and 3rd largest in Latin America; 2nd largest
automotive industry, 1st in internal sales of vehicles, and largest concentration of
biotechnology companies in Latin America

‣ 2nd largest agricultural and livestock production
Minas Gerais is the leading coffee, milk and potato producer in the country; 2nd cattle
and bean producer; 3rd sugar cane and swine producer and 4th orange producer in the
country

Minas Gerais

Infrastructure and services

‣ Tancredo Neves International Airport is the 1st industrial airport
of the country (free trade area system)
‣ The state has the largest road and railway network in Brazil

‣ CEMIG, the largest electric utility network in the country, serves
more than 18 million people in 774 municipalities, and generates
13.8% of the total Brazilian electric energy generation
‣ 100% of the state territory is covered by mobile telephone, and
broadband access to the Internet is available in most of the
urban areas of the state
‣ Minas is the leading provider of biotechnology and software
development services in the country

Minas Gerais

Human development and regional features

‣ MHDI 0,799 Minas Gerais
Human Development Index - 2000

‣ Minas Gerais provides a synthesis of
the socio-economic features of Brazil
More wealth and highest HDI in the southern, western
and central areas of the state (pattern of the
southeastern Brazilian region)
Less wealth and lower HDI
in the northern and eastern areas
of the state (pattern of the northern
and northeastern Brazilian regions)

0,568 a 0,667 (171)
0,668 a 0,707 (171)
0,708 a 0,743 (175)
0,744 a 0,770 (173)
0,771 a 0,841 (163)

Minas Gerais

National Context

‣ Democratic opening and expansion of social spending (current),
yet with unsatisfactory improvement of social indicators

‣ “Fake dilemma” between economic growth and social
development linked to the role of the State:
Between 1994 and 2005, average annual growth reached 2,7% (8,8% in the 1970s).
The increase in current spending was funded mainly by suppression of investments
and increase of the tax load

Management Shock
1st generation

Minas Gerais Context

R$2,4 billion – 12% of the total budget –
of the deficit anticipated for 2003 (approximately US$ 1 billion)

Precarious infrastructure Difficulty to fulfill obligations Difficulty
and public services in a timely manner to raise resources

Linkages consumed 103% of R$1,3 bi ( US$ 550 million) of Federal transfer of
current net revenues (CNR): outstanding debt with suppliers
Constitutional 63% resources suspended
Debt 13% Payment default to the Federal
Government with resulting Lack of international credit
Others 27%
interests
Inactive economy
72% of CNR spent on payment
of salaries

Lack of financial resources for
payment of Christmas bonus

Difficulty to pay state
employees salaries on time

Management Shock
1st generation

— Fiscal Responsibility Act (2000)

The main indicators of the Fiscal Responsibility Act were not
achieved
Personnel expenses (Executive Power)

62,80%
61,70%

Executive
Power Limit
53,60%
49%

48,30%
46,40%
44,60%
43,50%
Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07

Management Shock Source: SIAFI

Management Shock
1st generation

— Fiscal Responsibility Act (2000)

The debt blocked access to new credit operations
Funded Debt / Current Net Revenues

262,70%

242,80% Debt ceiling
234,50% for the Fiscal
224,50% Responsibility
Act (200%)
203,10%
189,10% 187,80%


Source: SIAFI
Management Shock

Management Shock
1st generation

Inception of the Management Shock

‣ A combination of fiscal adjustment with vigorous
development-oriented initiatives
‣ Adoption of necessary and hard short-term measures under
long-term planning
‣ Comprehensive coherent management-change strategies vs
focused fragmentary strategies

Management Shock
1st generation

Short-term Measures

‣ Emergency measures:
Closing of 6 Secretariats, 43 Superintendencies and 16 Directorates, and extinguishing of
3,000 commissioned positions and functions
Salary ceiling set
Renegotiation of debt - Auction
Contingency of 20% of the expenses funded by Treasury Funds

‣ New management model:
Extinguishing of supplementation (Apostilamento)
Centralization of payrolls
Replacement of service time beneﬁts with additional compensation based on performance
- Results agreements and Incentive bonus
Mandatory public bidding (electronic reverse auction) and creation of electronic price
quotation

Management Shock
1st generation

Short-term Measures

The results of the matrix expenditure management generated a
flow of resources for the prioritary programs of the Government

Reduction of R$ 304 million (US$ 130 million)
in budget expenditure (2003/2004)

Price reduction Consumption reduction

Through centralized acquisitions, Reduction of materials and services
bidding, and registration of the prices consumption by setting goals and
of food, communication, computing, control systems (fleet, medicine and
maintenance, health, outsourcing and prison system)
vehicles

Management Shock
1st generation

The Technology of Planning

Turn Minas Gerais into
the best state in which to live

Reorganize and Promote sustainable Recover the
modernize the public social and economic political strength
administration development of Minas Gerais

Management Shock
1st generation


HDI
Public Management Social Development
Management shock Health
Efficiency Education
Fiscal responsibility Safety
Revenues Social Inclusion
Investments

Infrastructure and Economic
Environment Development
Transportation Wealth
Energy Income
Sanitation Employment
Environment

Management Shock
1st generation


DOUBLE PLANNING GERAES Strategic Management of
Resources and State Actions

Design of plans (medium and long Transform the main strategy of the
terms) and budgets (short term) state into results
coherent with the objective of
reaching our vision of the future Include the structural projects
involved in the long - (PMDI),
medium- (PPAG) and short-term
(LOA) planning tools

Incorporate management-intensive
project techniques

Introduce mechanisms to encourage
achievement of the structural
projects objectives

Permit evaluation of the coherence
between resources and the strategy
and agility of corrective measures

Management Shock
1st generation

Syllabus
— The World Bank

Minas Gerais

Management Shock – 1st generation — Results



Results
— Public Management

The state has had 4 consecutive years of positive fiscal results,
after one entire decade of fiscal imbalance
Fiscal result (since 1995)
222 190
91 81
-102

-391 -441 -389
(R$ milion)

-677
-751
-941

-1.223
-1.433

Dec 95 Dec 96 Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07

Management Shock

Management Shock
1st generation - Result

Results 9.000
— Public Management (all sources and
state-owned
companies)

Investments made with state treasury funds grew 546%
between 2003 and 2007

Investments of US$ 2 billion Investments (Treasury funds)
with state treasury fiscal 3.590
resources are expected in 2008,
and R$ 9 billion (US$ 5 billion)
considering the total budget of

(R$ milion)
2.356
2.182
the Government
1.645

2004-2007: Committed expenditure
848
2008: Budgetary proposal
Ordinary sources and other state treasury 338
discritionary sources, and State-owned companies
Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08

Management Shock

Results

As a result of higher efficiency and the fiscal relief implemented
by the Minas Gerais government, even with a tax reduction
program, Value Added Tax (ICMS) collection was raised above
that of the Southeastern region and Brazilian average
Nominal Variation of ICMS Revenue — Minas Gerais X Brazil X Southeast — 2006/2003
54,3%
44,7% 42,4%

Minas Gerais Southeast Brazil

Source: Conselho Nacional de Política Fazendária –
National Council of Public Treasury Policy

Management Shock

Results

Value Added Tax (ICMS) reduction for 152 low-end
consumption products

Food Building Materials

Cleaning and Personal
Teaching Materials
Hygiene Products

Source: National Council of Public Treasury Policy

Management Shock

Results

‣ Individual Performance Evaluation – ADP
Approximately:
100.000 state employees evaluated
18.000 evaluators
7.000 Evaluation Commissions

‣ 23 results agreements executed and prizes in the amount of
R$ 112 million (US$ 48 million) awarded between 2003 and 2006

Management Shock

Results

‣ Public-Private Partnerships (PPP)

2004 2005 2006 2007 2008

PPP state laws Warranties made Delivery of prison MG 050 PPP Publication of public
approved available for the unit modelling agreement signed – notice for PPP for
first PPP (3,000 vacancies) 1st Public-Private construction of a
Implementation operations Road Partnership Prison Complex
of the PPP Unit in Brazil (3,000 vacancies)

The 25 years PPP’s PPP approval for
delegation of MG maintenance and
050 (372 km) control of the state
foresees private road network
investment close to
R$ 645 million (US$
364 million) (R$ 320
million (US$ 181
million) in the first
five years), and
maximum state
annual counterpart
of R$ 7,89 million

Management Shock

Results
— Infrastructure

Various contracts are being signed for recovery and
maintenance of roads during five years, following road standard
indicators
km contracted by ProMG Pleno
8.981,7

By 2011
all the state
road network
will be
maintained by
1.795 the ProMG
Pleno and the
716,3 PPPs.
0

Source: SETOP

Management Shock

Results
— Infrastructure

Commitment to provide paved road access to 224 municipalities
not served is being fulfilled
Number of municipalities with paved road access 100% of municipalities
served

853

760
131 Municipalities with
708 road constructions
681 concluded - 4.746 km
659
629 632
Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11

Source: DER-MG

Management Shock

Results
— Economic Development

The state presented the best industrial dynamics of the country
in 2007
Percent variation of the physical-industrial production – General industry
(past 12 months ended in December 2007)

8,6%
7,5% 7,5%
6,7% 6,2% 6,0%
5,4%

Minas Gerais Espirito Santo Rio Grande do Sul Paraná São Paulo Brazil Santa Catarina

Source: PIM-PF Regional/IBGE

Management Shock

Results
— Social Development

In the state schools network, the % of students with the
recommended level of reading competence was increased to
35% (2006-2007)
% of students with the recommended
level of reading competence
100,0%
Leading position in the ranking of
Brazilian schools performance recovered

Champion of the Brazilian Math Olympics
65,7% Best literacy performance in the country

First Brazilian state to implement the 9-
48,6%
year fundamental school and distribute
textbooks to all students
Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11

* First year of evaluation of the recommended level of reading competence
Source: Ceale/UFMG, Caed/UFJF e SEE

Management Shock

Results

Sewage treatment has been continuously been expanded
% treated sewage collected
75%

42%
39%

29% 29%
26%

Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11

Source: Copasa
Project Vida no Vale (Life in the Valley) will
ensure access to basic sanitation to all
households by 2010 in the Northern and
Northeastern regions of Minas Gerais.

Management Shock

Results

Minas reduced hospital internment by offering the most
comprehensive preventive health care program in Brazil
% hospital internment for sensitive conditions
37,4%

33,1%
32,5%

29,0%

Sep/02 Sep/03 Sep/04 Sep/05 Sep/06 Sep/08 Sep/08 Sep/09 Sep/10 2011
Aug/03 Aug/04 Aug/05 Aug/06 Aug/07 Aug/09 Aug/09 Aug/10 Aug/11

Source: SES

Management Shock

Results

Minas Gerais has been consolidating its social defense policy
by gradually reducing violence in the state
Violent cases per 100 thousand inhabitants in Minas Gerais

108.591 109.030

101.720

92.335

85.526
Dec 03 Dec 04 Dec 05 Dec 06 Dec 07

Source: SEDS

Management Shock

Results
— Environment

The government expanded the regularization of protected areas:
41 thousand hectares of areas purchased for conservation

Regularized hectares
121.159

40.794

0 836 1.529

Source: SEMAD

Management Shock

Results
— Environment

Deforestation in Minas reduced 30% (2006-2007), and, as a
consequence, native forest area will start expanding in 2011.
Average annual deforastation (hectares)

75.000

55.000

2003 - 2005 2006 - 2007

Management Shock

Basic Commitments

‣ Fiscal Quality
Fiscal balance as a prerequisite for governmental actions
Increased strategy investment, simplification and facilitation
Stabilize and implement public spending reduction as a proportion of the
state GDP. This step is necessary for a sustainable policy of fiscal load
reduction.
Expand the participation of public investments that increase the
competitiveness of the economy within total expenditure
Increase the quality and productivity of the sector expenditure with
different annual goals aimed at the growth of target costing (positive) and
of support activities (negative) – anticipated reduction of US$ 500 million in
4 years

Management Shock
2nd generation

Basic Commitments

‣ Efficient management
Sectorial focus: quality and productivity of sectorial expenditure and public
relations

‣ Results
Monitoring and evaluation: Government performance measured by the
improvement of outcomes
Governance: Government coordination by Results Areas
Incentives: the results agreement of the sector contractualizes the result
areas

Management Shock
2nd generation

Efficient Management
Management shock development

1st Generation 2nd Generation

Institutional Reorganization for reduction Institutional Reorganization to achieve
of expenditure strategy

Management Agenda Management model Management Agenda Sectorial approach
applicable to all sectors of the administration stemming from strategy

Strategy – Geares Intensive Project Results-oriented State and Geraes Strategic
Management Budget-Plan Integration management of the portfolio and monitoring
of results
Implementation of Results Agreement;
Additional compensation based on Adequacy of Results agreements and
performance; Productivity prize productivity prize to the strategy

State employee valuation Salary Expansion of state employee
payments on time, settlement of overdue professionalization Occupational
salaries and restructure of careers ertification Managerial development

Management Shock
2nd generation

Management Model
— Acceleration of Learning


Products
Inputs Activities Results Long term
(What the project (Outputs)
(Resources)
accomplishes) (Goods and (Outcomes) results
Services)

Schools Elaboration of a Elaborate Reduction of Increased
methodology for the methodology
Teaching acceleration of learning
the number of human welfare
materials Qualified teachers unmatching Increased
Distribution of teaching age/school
Teachers materials Students productivity
Students attended level groups in
Teacher qualification Fundamental
Classes and High
Schools

2a. Management Shock - generation
Source: Banco Mundial

Management Shock
2nd generation

New structure of the Management Model

Outcomes

Sector Management
Strategic Projects
Agenda

Development Improvement and Expenditure
Rationalization Indicators

Management Shock
2nd generation

Minas: the best state in which to live

Integrated Development Plan 2007/2023 - strategy

Human Capital Competitive
Investment Network Eqüity and Environmental
Integrated Territorial
and Business of cities welfare sustainability
Perspective Integration

Results-Oriented State

Result Areas
Investment and Added Poverty Reduction and Network of Cities and
Quality Education Value of Production Services
Productive Inclusion

Quality and Innovation
Public Management
Innovation, Technology Environmental quality
Healthy Life and Quality Development of the
Fiscal Quality

Northern Area of Minas
Development and Gerais: Jequitinhonha,
Juvenile Protagonism Mucuri and Rio Doce Social Defense
Integration Logistics

Public Policy Addressees

Dynamic and Equity between
Qualified, healthy, Protagonist Safe well-cared
innovative people and
educated people youth for cities
companies between regions

Management Shock
2nd generation

Quality Education
— Strategic objectives

‣ Achieve a leap in the average schooling of the population under
an efficient system with high levels of equity, guided by
international cost and quality standards
‣ Reduce regional learning discrepancies in Minas Gerais

‣ Achieve a quality leap in teaching, guided by international
standards

Management Shock
2nd generation

Quality Education
— Examples of end results agreed upon

Indicator Status Goal 2011

6,6 anos em 2004 7,5 years
Increase average schooling of 15-year-old boys and girls
6,8 anos em 2006

8,4 years in 2004 10 years
Increase average schooling of 18-year-old boys and girls
9,1 years in 2006

45,2% in 2006
Increase the number of readers at the age of 8 years. 100%
58,1% in 2007

189,7 in 2003 225
Improve fundamental school learning -Mathematics
196,5 in 2007

Management Shock
2nd generation

Quality Education
— Structural Projects and Sectorial Agenda

Outcomes

Strategic Projects Sector Management Agenda
Full time schooling Optimize the structures and the scope of
the Regional School Superintendencies.
School and Teaching Quality Assessment
Systems Strengthen qualitative and quantitative
Teacher Qualification and Performance partnerships with the Third Sector

New Management and Basic Education Improve and consolidate the cost system
Standards of the Secretariat of Education

Management Shock
2nd generation

Syllabus
— The World Bank

Minas Gerais


Management Shock – 2nd generation Implementation of the Strategy


Examples of results Agreements


and Business of cities welfare sustainability


Result Areas
The Secretariats of Education, Sports Network of Cities and
Investment and Added Poverty Reduction and
and Youth, and SocialProduction
Quality Education Value of Development Services
agreed with the Governor on the goals Productive Inclusion

for Juvenile Protagonism Area

Public Management
Fiscal Quality




Implementation of the Strategy

Examples of results Agreements


and Business of cities After that, the Secretary of Education
welfare sustainability
agreed with the Governor on a set of
goals for their Result Areas


Result Areas
Investment and Added Poverty Reduction and Network of Cities and
Quality Education Value of Production Services
Productive Inclusion

Public Management
Fiscal Quality





New structure of the Results Agreement

Outcomes

Management Shock Results
Stategic Projects Sector Agenda Agreement
1ª stage

Spending and Performance Improvement
Rationalization Indicators

Results Agreement
Goals development per team
2nd stage


Incentives

‣ Productivity prize (results-oriented bonus)
Fiscal Balance is a prerequisite
Bonus amount considers the grade obtained in the Results Agreement
Prize granting to teams based on performance

‣ Other incentives
Meal tickets
Transportation vouchers
Autonomy to reestructure job titles – merger, demerger – according to the
strategy
More budgetary and acquisition policy autonomy



‣ Strengthening of the governance model
Improve the relationships between end indicators, projects and products
Support and legitimate the monitoring and evaluation of the strategy

‣ Support to sectorial management shocks
Technical cooperation aimed at achieving fiscal quality and efficient management
Support to implement management reform in 7 Result Areas

‣ Ensure more scaling and agility in the implementation of the
strategy of nine selected Result Areas
Total eligible expenditure (2008-2010): R$ 10,9 billion (US$ 6 billion)
Maximum BIRD reimbursement after reaching the annual goals of eligible expenses:
R$ 1,7 billion (US$ 976 million)
Counterpart: accomplishment of result areas end indicators

World Bank
partnership


‣ Social Governance: expand the participation of the society in the
definition, follow up and evaluation of public policies
Expand or allow participation of the civil society in State Councils, Result Agreements
assessment committees, and in other sites of political debate
Qualify the society and release information about the implementation of public policies

‣ Using the experience of Minas Gerais, offer support to national
reforms aimed at achieving:
Fiscal quality
Efficient management
Innovative public policies for social development

World Bank
partnership

Performace Evaluation
— Government of Minas Gerais

100% 95% 94% 93% 93%
90% 90% 90% 91% 92%
84% 85% 85%

74%

20%
11% 10%
9% 8% 9%
6% 6% 5% 5% 5% 5%
4% 4%
6% 5% 5% 4% 4%
2% 1% 1% 1% 2% 2% 2%

Mar 03 Sep 03 May 04 Jul 04 Dec 04 Feb 05 Dec 05 Mar 06 Dec 06 Apr 07 Jul 07 Dec 07 Mar 08

Source: FIEMG/Vox Populi Institute
Positive Negative NR / NS

World Bank
partnership

Minas. Results Oriented State.

Recommended

Recommended

More Related Content

Similar to Minas. Results Oriented State.

Similar to Minas. Results Oriented State. (20)

Recently uploaded

Recently uploaded (8)

Minas. Results Oriented State.